Meme trade: Why you should throw fundamentals 'out the window'

The meme trade has been reignited after Roaring Kitty's return to the social media platform X, where he posted a single meme, sending investors into a frenzy. YouTube Host Matt Kohrs joins Wealth! to discuss his outlook on this meme stock rally.

Kohrs describes this rally as "the resurgence of meme mania," reminiscent of a similar rally that occurred back in 2021. He advises throwing fundamentals "out the window" regarding these stocks because the trading is more of "a social rebellion." He recommends that investors "ride the trend" as long as they can but cautions that if things take a turn, they will "turn violently."

"Ideally, we're all in this to improve our own financial situation," Kohrs tells Yahoo Finance. "So because of that, I wouldn't want anyone listening to this, watching this, to fumble such an amazing opportunity."

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video Transcript

The shares of Meme Stock says we were talking about gamestop ticker GME soaring over the last two days up 200% here to remind viewers.

A meme stock is a company that has gained viral popularity online.

The excitement or frenzy around the company usually occurs on social media platforms and then the results.

Yeah, big price swings.

So the recent price action was spurred by this, just this, the man sitting there then leaning forward, but it's because of who it was tweeted out by the return of Trader and youtuber Roaring Kitty on X formerly Twitter after nearly three years of a posting hiatus.

Roaring kitty.

Uh A K A Keith Gill is known for helping ignite the meme sock frenzy of gamestop back in 2021.

0, by the way, that figure has remote controller or the gaming remote in its hands.

But anyway, our next guest says that there's more to the frenzy than just the return of Roy Kitty here with more.

We've got Matt cos who is the host of the Matt core show.

Matt.

Always a pleasure to speak with you.

Get some of your insight here.

Uh We should kind of lay it straight for a lot of the folks who are watching here, your, your position.

You're not in gamestop or A MC right now, are you?

Yeah, I actually, unfortunately, uh, kind of missed the boat on this recent swing to the upside.

And as much as I get that there's a lot of quote unquote, degeneracy and YOLO and that type of thing.

Obviously, you still want to approach it with some semblance of risk and I missed the boat.

But hey, the play is not over, you never know if there's gonna be some sort of dip opportunity.

And so with that in mind, what should people be watching out for as they're looking at stock charts like GME like a MC and particularly where some of the frenzy has pushed the uh price action higher by 200% in the past couple of days here for GME, particularly a phenomenal question.

I think one of the main things to hear about this play and what's going on is it's very similar to 2021.

This is the resurgence of me mania if you will, which means all the discussion about fundamentals, is it fundamentally fair, overvalued, undervalued?

I would actually contend just throw that out the window right now.

This is much more of a social rebellion than anything else.

And then you have tickers such as and me and other ones that are just the representation.

They are the vessel of that social rebellion.

So I get that a lot of people want to dive into the fundamentals and that's great.

And I think that has a place in all forms of trading and investing, but specifically investing, this is much more of riding that almost that meme social culture.

So for me, and this is some of the harsh lessons that I personally had to learn from 2021 2022 and 2023 is ride the tread as long as the party is on, I personally have no issue with being at the party and keeping my position.

But the harsh thing that I learned in 2021 is when things turn, they turn violently.

So I think every single person, if you are willing to take the higher risk, higher reward set up of getting into the play, don't just go with the start.

You have to have some sort of exit plan.

And I understand right now there's people watching this.

There's many people who are going to react to it.

We are going to be angry that I'm just not, I guess singing the Accolades of Diamond Hands.

But in my mind, what's the point of taking such a risky play if you're willing to say, hey, I'm never going to take the money no matter what, at a certain point, we're all in this to ideally improve our own financial situation.

So because of that, I wouldn't want anyone listening to this, watching this to fumble.

Such an amazing opportunity.